Bulgaria's Fibank revamps plan to raise $112 mln to boost capital

First Investment Bank AD

16/04/2020 03:40

By Tsvetelia Tsolova
    SOFIA, April 16 (Reuters) - Bulgaria's First Investment Bank
(Fibank)  5F4.BB  has revamped a 200 million levs ($111.5
million) capital-raising plan that  the regulator rejected
earlier this year, in a crucial step as the EU member state
boosts efforts towards adopting the euro.
    The Balkan country's fifth-largest lender needs to bolster
its capital after a comprehensive assessment of six Bulgarian
lenders by the European Central Bank (ECB) last year found a
capital shortfall of 263 million euros ($286 million) at Fibank.
    Fibank's capital increase is the last box Bulgaria has to
tick before it can get a nod to enter the European Union's (EU)
banking union and the euro zone's "waiting room". Sofia wants to
apply to join both at the end of April.  urn:newsml:reuters.com:*:nL5N2BY1B4 
    Fibank plans to offer 25 million new shares at 8 levs per
share, it said in a statement late on Wednesday, adding that it
would consider the issue a success if as few as 2.5 million
shares were sold. 
    In December the bank wanted to raise the same amount by
selling 40 million shares at 5 levs per share, but in February
the Bulgarian financial regulator rejected its prospectus
without revealing publicly the grounds for its decision.  
    "The management board has decided to change key parameters
of a new issue of shares via public offering," the bank said in
the statement, adding it has submitted a new prospectus to the
financial regulator for approval.
    The regulator, the Financial Supervision Commission, has two
weeks to approve the prospectus or ask for additional
information. 
    The new issue price of 8 levs per share is almost four times
the price of 2.16 levs at which the bank's shares traded on
Wednesday at the Bulgarian Stock Exchange.
    The bank said the offered price reflected the balance-sheet
value per share, valuations of recent bank acquisitions in the
country, the bank's size, market position and its financial
indicators, among others.
    Fibank said it has managed to secure an additional capital
buffer of over 197 million euros through capital enhancement and
risk mitigation measures last year. 
    Bulgarian businessmen Tseko Minev and Ivaylo Mutafchiev each
own 42.5% of the lender, which had total assets of 10.7 billion
levs at the end of 2019. The remaining 15% has been floated on
the Bulgarian Stock Exchange. 
    ($1 = 1.7938 leva)
    ($1 = 0.9180 euros)

 (Reporting by Tsvetelia Tsolova; Editing by Muralikumar
Anantharaman)
 ((tsvetelia.tsolova@thomsonreuters.com; +359-2-93-99-731;))